Cheque advance / free short term loan solution

Aisodoeht

Hello

I am totally new to the world of credit cards and finance etc and would appreciate some advice. I have read a number of Martin's articles surrounding short term interest free loans and looked up a lot of stuff on the web. I am looking to borrow £1500 over 12 - 24 months-ish.

For a free short term loan, Martin suggests doing a 0% BT from the Egg Money Card then transferring the cash to a current account as Egg lets you do this for free if the account is in credit.

My question is, surely an easier way to do this is to use the Cheque Advance card feature, usually it is available at the same rate as the BT and charges the same fee? I have been looking at the Virgin card, linked below:

http://www.moneysupermarket.com/cards/CardDetails.asp?CardId=671&feature=StandardTrans&CardType=credit%20card&AnnualFee=1&Adverse=0&EnquiryId=15496154&AnnualFee=Any&Adverse=No&BalanceTransferFee=1&CardType=credit%20card&CardTypeCC=1&CardTypeGP=1&CardTypeOL=&CardTypeER=

It offers 0% BT for 15months with a 2.98% fee. It also offers a 0% Cheque Advance feature (so you can put money in your current account) for 15months with a 2.98% fee.

I am considering doing the Cheque Advance as it seems so much easier for the exact same outcome. Are there any hidden fees or charges I have not seen? Will this let me get a £1500 loan for 15months at 0% interest for only £44.70 (the 2.98% CA fee)??

Advice appreciated, I hope this all makes sense?

Many thanks indeed,

Zoe

Aisodoeht

As an afterthought, sorry if this should be in a 'debt' section.

Do you think the credit card trick is my best solution, or should I move my overdraft to an account with a 0% overdraft intro rate and pay it off that way?

Bokkens

You have got the right idea both ways work depending on your circumstance you may prefer one over the other as you mentioned you think one is easier than the other.
I would choose the method you understand and are comfortable with.
Overdrafts are generally more expensive on a monthly basis.
The MBNA(Virgin,A&L) allow you to borrow the funds and pay a low monthly rate ie.£5 + the BT fee,then it is just the £5 per month until the end of the 0% period where you should aim to more the debt to another new 0% card or pay the debt off in full.
The only thing you nee to check is ,if you fail to make a monthly payment or are paying late you will loose the 0% offer and the interest will be added immeadiately to the loan amount.So make sure you request the credit card company to set up a Direct Debit while you are talking to them on the phone this is free and takes a couple of mintues and is then hassel frre for the next 9 months.
Good luck.

Aisodoeht

Hi Bokken,

Many thanks for your reply. When you say I have it right both ways - do you mean with the credit cards and overdraft? Do you know anything about the cheque advance feature I mentioned?

Thanks again

Zoe

Bokkens

Some companies MBNA,(A&L<Virgin,Abby,MINT) etc send checques to you and you write out one to yourself not exceeding your credit limit present it to your bank and the cash appears shortly afterwards in your account and the debt appears on your credit card.
This is termed a Super Balance transfer by Martin as the money goes into your account.
I would sit back and look at the cheque method and then compare that to your overdraft idea,will it do what you want will funds end up in the right account what fee is there for moving my money.Can I avoid the fee on the overdraft?Which will be quicker? Which will be cheaper?can I reverse my decision and send the money back or somewhere else if I need to?
These are some of the questions I would want to know before I moved my money so work out the answers relating to your circumstances and if you are happy go ahead.
There will be a fee for moving the funds so check how much before you comit to it.
You can do it the EGG way or you can do it the cheque way .
Normal BT's move debt between credit card accounts.

YorkshireBoy

Aisodoeht wrote: »

surely an easier way to do this is to use the Cheque Advance card feature, usually it is available at the same rate as the BT and charges the same fee?

That's an incorrect assumption. I'm only aware (as I think about it now) of MBNA - who run the Virgin card - and Mint who "usually" offer cheques at the same 0% intro rate as BT's. Most (all?) other providers have a different cash withdrawal interest rate/fee structure for their cheques.

Re the Virgin 'super balance transfer'...since they allow the transfer of an overdraft to the card (by paying money directly into your current account), you don't need to bother asking them to send you some cheques.

Re the overdraft...remember that all you are saving here is a very small amount of debit interest each month - you are NOT 'paying it off', but simply transferring the debt to a lower interest rate. You need to have a budget and plan in place, eg earn more/spend less, to actually clear the debt.

Remember that the minimum payments on some cards (although not Virgin, but possibly when you switch the debt later) may be more than the debit interest you're paying now. How will you fund these, without creating a new overdraft?

Whatever you do, set up a minimum payment DD on the card because if you miss a payment they WILL remove your 0% rate and quite possibly (judging by recent posts on here) double your interest rate to circa 29.9%.